6011ASSIGNMENT
6011ASSIGNMENT
6011ASSIGNMENT
4 On April 30, 2020, Canuck Oil Corp. purchased an oil tanker depot for $
1,200,000 cash. The company expects to operate this depot for eight years, at
which time they will be legally required to dismantle the structure and remove the
underground storage tanks. Canuck Oil estimates this asset retirement obligation
(ARO) will cost $ 200,000. Assuming a 5% discount rate, to the nearest dollar, the
amount to be recorded as the ARO is
a) $ 25,000.
b) $ 135,368.
c) $ 150,000.
d) $ 295,491.
5 Robertson Corp. uses the revenue approach to account for warranties. During
2020, the company sold $ 750,000 worth of products, all of which carried a two-year
warranty (included in the price). It was estimated that 2% of the selling price
represented the warranty portion, and that 40% of this related to 2020, and 60% to
2021. Assuming that Robertson incurred costs of $ 5.500 to service the warranties
in 2021, what is the net warranty revenue (revenue minus warranty costs) for 2021?
a) $ 3,500
b) $ 9,500
c) $ 5,500
d) $ 9,000
Instructions
Prepare the journal entry to record the cash received by Mishin on May 1, the entry
to record interest expense at the company’s July 31 year-end and the entry at
maturity of the note
Date Description DR CR
May 1 2020 Cash 250,000
Notes Payable 250,000
(Record Cash received by Mishni)
Instructions
Determine the premium expense to be reported in the income statement and the
estimated liability for premiums on the statement of financial position for 2020 and
2021
2020 2021
Premium expense $ 24,000 (1) $ 28,800 (3)
Estimated liability for premiums 6,000 (2) 10,800 (4)
9 On January 1, 2011 (the date of grant), Henrik Co. issues 2,000 shares of restricted shares
to its executives. The fair value of these shares is $75,000, and their par value is $10,000.
The shares are forfeited if the executives do not complete 3 years of employment with the
company. Assuming the service period is three years, how much compensation expense
will Henrik Co. record on January 1, 2011?
a. $25,000.
b. $-0-
c. $3,333.
d. $21,667
10 On January 1, 2017, Foley Co. sold 12% bonds with a face value of $300,000. The bonds mature in five years,
and interest is paid semiannually on June 30 and December 31. The bonds were sold for $323,100 to yield 10%.
Using the effective-interest method of amortization, interest expense for 2017 is approximately:
a) 38,772
b) 30,000
c) 32,218
d) 32,310
a two-year
A manufacturing firm is able to produce
1 comma 8001,800
pairs of shoes per hour at maximum efficiency. There are three
eight-hour
shifts each day. Production is actually
1 comma 5001,500
pairs of shoes per hour due to unavoidable operating interruptions. The plant is expected to run every day but was on
What is the theoretical capacity for the month ofSeptember?
restricted shares
alue is $10,000.
oyment with the
ation expense